Oct 2, 2007

If there is one sales mistake that has to be the biggest mistake you can make, it is this:

OVER-committing on a product capability, service offering, distribution timeline, or price. Actually, the bigger problem comes when you UNDER deliver. So, I want to talk about this critical component of sales and operation teamwork that builds company success: the concept that you must UNDER-COMMIT and OVER-DELIVER.

The fact is, it is human nature to want to commit to what prospects request - even when their request is unreasonable - because we WANT to make a sale. However, committing to a customer when you cannot deliver on that commitment will cost you more than an order: it may cost you a customer for life.

I once had this happen to me when my company's service collapsed. I had committed to my client, Home Express, that I would take care of them if something happened while we emerged from Chapter 11 bankruptcy protection. She signed with us. Then, six months later, it just so happened that my two-day vacation coincided with when my company filed Chapter 11 again as part of a sale proceed to become Decision Servcom, Inc. I could have cancelled the skiing trip because I knew we were going to be purchased and going through a merger, but I knew tough times were ahead and it would be the only vacation I was likely to get for a couple of months. So, I went anyway.

While I was gone, things went bad. As a result or the company having to put all of these customers from the old company into the new company in (all in ONE DAY) the computer switchboard for our technical support WENT DOWN for a whole day (AUGHH!! Nightmare scenario if you're in the service business). But, rather than being able to HANDLE my customers smoothly by just calling each of them and having them call a temporary contact to get service calls dispatched, I was off snow skiing and unable to do anything about it. My service manager ought to have been on the phone with my clients, anyway, but he did nothing. Nobody did anything. The buck stops with the salesperson, as far as the client is concerned. And, as a result, my company fell into breach of contract. My customer sent me a letter terminating their agreement with my firm, effective immediately, the very next day. Can you blame them? I sure couldn't. I had to strike it up to a lesson learned to always have a double-contingency plan whenever any serious service challenge might occur with my company's ability to deliver. However, the worst thing about it was I lost the relationship with the CIO - someone who I really, really liked and would have preferred remaining friends and business associates with throughout my career.

See, what happens when we don't deliver what we promise is that we lose credibility. Worse than that, we often cost OTHER people their jobs, security, money, or happiness by not delivering what we commit. We force them to go to a competitor.

I remember a positive story, when I was assigned US Sprint up in Sacramento while selling for JWP/Businessland post-merger. I remember meeting the buyer for US Sprint, a guy I'll call Edward for this article's sake. Edward told me that he didn't want to give me his business because my company had missed distribution commitment dates since merging with JWP. This amounted to four months of missed commitments. That made him look bad. So, he went elsewhere. But, he WAS LOYAL to my firm, prior to the merger. Now, I recall reading from a Dale Carnegie book that if you want people to see your way of thinking, first agree with them. I knew that my company, JWP, still couldn't hit a delivery date if it had to. We just weren't shipping anything right. The customer was right. So, I decided to personally suck it up and told Edward, "Look, I agree with you. We can't deliver anything complete and on-time right now. I can't blame you for feeling the way you do, and I apologize for the problem you experienced before I took over handling your account."

Then I said something dramatically shocking to the buyer: "Edward, I'd like to ask you NOT to buy from me right now."

That's right. Those are the exact words that came out of my mouth. I'm not sure what possessed me to say it. But I just couldn't see anyway I could risk this huge account and all their business over another messed up order. I had nothing to lose, as he wasn't buying from us anymore, anyway. And, he was right: the next order simply had to get there on time, complete. And, I didn't think my company could do it, either. So, I agreed with him, and told him NOT to buy from me. BUT, I had a strategy in mind. I then asked for his FIRM COMMITMENT in return from my commitment to him. There's a rule in sales that you don't ever give a concession without getting one in return. I utilized that rule here:

"Edward, what I'd like to ask of you, in exchange for my commitment to you not to buy from us now, is that when I DO call and tell you that it is OKAY to buy from us again and that we'll DELIVER ON TIME a COMPLETE ORDER per your requirements, then I'd like you to give me back at least 80% of your business. Is that fair?"

His reply: "If you can deliver on the order you'll get as high a percentage as you used to." This seemed like a fair agreement. He smiled. The body language said, "you've got my trust, now earn it."

I remember once my company delivered two weeks of perfect orders to my other clients, I called up Edward and notified him that it was okay to order from us again, and we could meet his expectations. Notice, I didn't over commit, I just said we'd meet his expectations. Two days later, when I sent out my newsletter with the new Macs on it, Edward called me. He placed an order the same day for $60,000 dollars worth of Macs, which at the time was a decent order that made a third of my quota for the month. As a way of saying "Thank you for trusting in me" I took the client to golf. That's now over-delivering, right? We then delivered the order on time, and I continued to receive $60,000 orders for the next three months straight with that customer, up until I left the firm.

You see, you build credibility when you deliver beyond your commitments. Whether it is a pricing model, a distribution time frame, or a service quality, these are the evidence of our true relationship, from a customer's perspective. If we miss on all of these areas, we're in big trouble!

I recently signed up as an affiliate for a company who needs to ship products to fulfill their agreement. Well, unfortunately for both of us, they aren't shipping products on time. Worse yet, they are shipping completely different products due to a manufacturing defect. Their communication has been poor. And last, worst of all, they're shipping incomplete orders. Coupled with not making up for the credits they give me for the orders I place, this is about a 4-way losing scenario on their part for fulfilling their commitment. Top it off with their billing me over-zealously before they can even ship the product, and I'd throw money into the equation, too. So, I sent them an email on Friday explaining that I wanted a credit and explanation or solution to these problems. Guess what? Still no email or phone call back.

I've come to the conclusion that this company is just not ready for me to be involved with them. It's too bad, but I just cannot expose MY customers to THEIR broken promises. It is a bad reflection upon me. Can you blame me?

So, if you're in charge of an operation, be it sales, operations, or the CEO of a company, make sure you first under commit to what you CAN deliver. Make sure you are honest with people. They will respect you for it in the long run. And then, be sure you over-deliver to the requirements you sold. When you do this, you create a lifetime of happy customers. I know this because I've experienced both sides of this under-commit, over-deliver coin as both salesman/supplier and as customer.

Build stronger relationships through honoring your commitments. It's a win-win for everyone if you do.